(Reuters) – Oil prices edged up on Tuesday as a massive winter storm hit crude production and affected refineries on the U.S. Gulf Coast, but the rise was curbed by a resumption in supply from Kazakhstan.
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Brent crude futures rose 23 cents, or 0.35%, at $65.82 a barrel as at 1017 GMT. U.S. West Texas Intermediate crude gained 29 cents, or 0.48%, to $60.92 a barrel.
The U.S. is facing a loss of production in the U.S. as a severe winter storm swept across the country, straining energy infrastructure and power grids.
U.S. oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated.
At the same time, several refineries along the U.S. Gulf Coast reported issues related to the freezing weather, which Daniel Hynes, an analyst at ANZ, said raised concerns about fuel supply disruption.
“The cold weather in the U.S. will likely cause quite significant drawdowns in oil stocks over the next few weeks, particularly if this weather persists,” said Tamas Varga, an oil analyst at brokerage PVM. This could continue to boost prices, he said.
The oil price rise was tempered by Kazakhstan, which is poised to resume production from its biggest oilfield, according to its energy ministry. Industry sources said volume was still low.
The CPC, which operates Kazakhstan’s main exporting pipeline, also said it returned to full loading capacity at its terminal on the Russian Black Sea coast after maintenance was completed at one of its three mooring points.
Some traders are also likely to be taking profit on heating oil, which has risen sharply in recent days due to the cold weather in the U.S., PVM’s Varga said.
On the geopolitical front, a U.S. aircraft carrier and supporting warships have arrived in the Middle East, two U.S. officials told Reuters on Monday, expanding President Donald Trump’s capabilities to defend U.S. forces, or potentially take military action against Iran.
“Supply risks haven’t totally evaporated… Tension in the Middle East persists after President Trump dispatched naval assets to the region,” Hynes said.
Further on the supply front, eight members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to keep the group’s pause on oil output increases for March at a meeting on February 1, three OPEC+ delegates told Reuters.
The eight OPEC+ members meeting are Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman.
Reporting by Anna Hirtenstein in London. Additional reporting by Jeslyn Lerh in Singapore; Additional reporting by Anushree Mukherjee in Bengaluru; Editing by Christopher Cushing and Emelia Sithole-Matarise
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